SAN DIEGO--(BUSINESS WIRE)--
Innovative Industrial Properties, Inc. (the “Company”) (NYSE: IIPR), the
leading provider of creative real estate capital solutions to the
medical-use cannabis industry, announced today that it closed on the
acquisition of the property located at Lot 1, Hopping Brook Road,
Holliston, Massachusetts, and entered into a long-term lease and
development agreement with a subsidiary of PharmaCann LLC (“PharmaCann”)
for an approximately 26,000 square foot industrial facility and an
approximately 32,000 square foot greenhouse facility on the property.
The purchase price for the property was $3.0 million. The PharmaCann
subsidiary is also expected to construct the two buildings at the
property, for which the Company has agreed to provide reimbursement of
up to $15.5 million (the “Construction Funding”). Assuming full
reimbursement for the construction, the Company’s total investment in
the property will be $18.5 million. PharmaCann operates two cultivation
and processing facilities and four registered medical-use cannabis
dispensaries in Illinois, one cultivation and processing facility and
four registered medical-use cannabis dispensaries in New York, and one
medical-use cannabis dispensary in Massachusetts, in addition to being
provisionally approved for medical-use cannabis cultivation and
processing at the property and dispensing at two other locations in
Massachusetts, and provisionally approved for cultivation in Ohio and
dispensing in both Maryland and Pennsylvania.
Concurrent with the closing of the purchase, the Company entered into a
long-term, triple-net lease agreement with the PharmaCann subsidiary,
which intends to operate the property upon completion of development as
a medical-use cannabis cultivation and processing facility in accordance
with Massachusetts medical-use cannabis regulations. The initial term of
the lease is 15.25 years, with two options to extend the term for two
additional five-year periods. The lease provides for an initial
annualized aggregate base rent of $2,682,500, payable monthly, which is
equal to 14.5% of the sum of the purchase price of the property and the
Construction Funding, subject to an initial six month base rent
abatement. The aggregate base rent is subject to 3.25% annual increases
during the term of the lease, and the PharmaCann subsidiary is also
responsible for paying the Company a property management fee equal to
1.5% of the then-current base rent. The PharmaCann subsidiary's
obligations under the lease are guaranteed by all affiliates operating
in the cannabis industry, including any entity formed during the term of
the lease.
The Company previously completed a sale-leaseback transaction with
PharmaCann for PharmaCann's New York medical-use cannabis cultivation
and processing facility in December 2016.
“We are very pleased to extend our relationship with PharmaCann and
support their continued growth into new states,” said Paul Smithers,
President and Chief Executive Officer of the Company. “We believe that
PharmaCann's highly skilled team of professionals sets a very high bar
for operational excellence and quality, and we look forward to the
continued expansion of their platform to reach more and more patients in
need.”
“We are thrilled to begin our work in Massachusetts to bring our
products to patients throughout the state, and to have Innovative
Industrial Properties as our capital and real estate partner in this
expansion,” said Teddy Scott, Chief Executive Officer of PharmaCann.
“IIP has been a strong partner since acquiring our New York property in
2016, and we look forward to working closely with IIP for the
development of this property in the months to come.”
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-advised Maryland
corporation focused on the acquisition, ownership and management of
specialized industrial properties leased to experienced, state-licensed
operators for their regulated medical-use cannabis facilities.
Innovative Industrial Properties, Inc. has elected to be taxed as a real
estate investment trust, commencing with the year ended December 31,
2017. Additional information is available at www.innovativeindustrialproperties.com.
About PharmaCann
PharmaCann LLC is one of the largest medical cannabis providers in the
nation, with nine dispensary locations and three production facilities
currently operating across multiple states. Focused on elevating the
role of cannabinoid-based therapies in the healthcare industry,
PharmaCann offers pharmaceutical grade cannabis products to patients
looking for relief from qualifying medical conditions. For more
information about PharmaCann, please visit www.pharmacann.com.
Innovative Industrial Properties
Forward-Looking Statements
This press release contains statements that the Company believes to
be “forward-looking statements” within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. All
statements other than historical facts, including, without limitation,
statements regarding the lease and development of the Massachusetts
property, PharmaCann and the Massachusetts medical-use cannabis market,
are forward-looking statements. When used in this press release, words
such as we “expect,” “intend,” “plan,” “estimate,” “anticipate,”
“believe” or “should” or the negative thereof or similar terminology are
generally intended to identify forward-looking statements. Such
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in,
or implied by, such statements.Investors should not place undue
reliance upon forward-looking statements. The Company disclaims any
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180531006468/en/
Catherine Hastings
Chief Financial Officer, Chief Accounting
Officer and Treasurer
Innovative Industrial Properties, Inc.
(858)
997-3332
Source: Innovative Industrial Properties, Inc.